The UK is in the midst of a housing crisis and has been for several decades. It has been a worsening problem, with a shortage of available housing restricting the number of places for people to buy and rent.
At face value, one would assume that new-builds provide a viable solution to the problem. However, negative public attitudes towards new homes have undermined their potential. At FJP Investment, we recently delved into the issue to uncover why homebuyers are shying away from new-builds, and what can be done to increase their popularity.
The housing crisis in a snapshot
The National Housing Federation’s estimates suggest that as many as 340,000 new homes must be built every year if the UK is to keep up with the huge demand for suitable living conditions. However, despite the housing crisis emerging as a regular topic within political speeches and budget announcements, at present these targets are being missed: in 2018, there were only 165,000 new-build completions registered in the England.
Yet this is only part of the problem. While the volume of new-builds being erected across the country dominates much of the discourse regarding the housing crisis, there is a further issue surrounding the desirability of the new properties – or, more accurately, a lack thereof.
How is the UK public responding to new-builds?
To uncover people’s sentiments towards new-builds, FJP Investment recently commissioned a body of research among more than 1,000 UK-based homeowners and property investors.
First and foremost, the study demonstrated that new-builds across the UK are attracting the interest of homebuyers and investors; more than three quarters (78%) of the respondents said they viewed one or more new-builds when buying their last property. However, despite the allure of such properties, the study also uncovered many areas of concern among homebuyers.
Chief amongst them was the physical characteristics of new properties. Indeed, 50% of homebuyers feel new-builds in the UK are unattractive, with an even greater number (63%) considering them to be ‘devoid of character’. Another important factor, and one which has made national headlines in recent years, is the quality of construction: 60% of respondents worry that new-build houses and flats are finished to a low standard, with poor workmanship resulting in underlying issues – if not immediately clear, cropping up further down the line.
Elsewhere, money was also a breaking point – two thirds (67%) of those polled criticized new-builds for being too expensive.
What can be done?
Given that new-builds are often held up as the most logical solution to the housing crisis (an issue involving a lack of affordable housing), what can be done to ensure that new-builds can continue to offer a promising solution?
Addressing people’s concerns about new-builds is an important task, not least because channeling significant volumes of public and private investment into the development of buildings that people don’t want to live in represents an ineffective solution to the housing crisis. It’s impossible to ignore the desperate need for millions of new houses to be built across the UK. However, we cannot fall into the trap of simply constructing properties of a poor quality, and at rates that price many out of the market.
So how do we go about increasing the popularity of new-builds?
In 2017, housing charity Shelter found that over half of homeowners (51%) experienced major problems including issues with construction, unfinished fittings and faults with utilities. Over two years on, and these issues continue to influence public perception of new-builds.
The natural place to start is therefore to raise building standards in order to produce more good quality homes – and at affordable prices. This will involve ensuring that all new-builds come with warranties that protect owners and occupants from any potential problems such as the NHBC Buildmark – a 10-year warranty scheme that offers protection for newly-built or converted homes. This will provide buyers with a peace of mind and help to restore some much-needed confidence in the government, and indeed the construction sector’s ability to tackle the housing crisis.
Other solutions involve developers working closely with councils to ensure that enough homes are being built, in the right places, and at the right prices. Working with the local authority building control will also ensure that each stage of development meets building regulation standards and will not present issues in the future.
New-builds hold great potential for accelerating the delivery of much-needed housing. However, the government must work together with the construction industry to ensure new homes are built to last, and are accessible to the wider population.
Jamie Johnson is the CEO of FJP Investment